Privacy and the management of user data has begun to catch the attention of lawmakers. Facebook, Google and other companies in Silicon Valley have begun revving up their lobbying efforts to ensure that any future privacy laws don’t impede upon their business models, which rely heavily on advertising.

The addition of both Sparapani and Kelly to Facebook’s staff was welcomed by members of the privacy community, who have often been critical of Facebook. Most recently, Facebook experienced a backlash from users when it revised its terms of service. Many perceived the change to imply that Facebook would hold onto users’ data even after they cancel their memberships. Facebook reverted to its original terms of service, claiming users own their data, and later had a user vote to reflect what the new terms of service should be.

During his testimony, Kelly highlighted the terms of service incident and how the company responded in a way that would not only be fair to users, but that would also mirror the reality of Facebook’s business model. Facebook does not reveal the identity of users to advertisers — just basic information (such as keywords) that allows Facebook to service up relevant ads.

“In offering its free service to users,” Kelly told congress, “Facebook is dedicated to developing advertising that is relevant and personal without invading users’ privacy, and to giving users more control over how their personal information is used in the online advertising environment.”

Kelly also said that Facebook was “inartful” in the way it introduced Beacon – which quickly became a major PR incident for the company. With Beacon, users’ buying actions were broadcasted to friends without their clear consent. The feature sparked controversy and drew the ire of MoveOn.org, the political advocacy group.

“We learned many lessons about the importance of user education and extensive control from the imperfect introduction of our Beacon product in 2007,” Kelly said. “As a result, Facebook continues to be dedicated to empowering consumers to control their information in both the noncommercial and the commercial context because we believe that should be the future of advertising.”

Kelly’s role in the privacy lobbying will become less significant this fall, as he runs for California Attorney General. As he campaigns, Sparapani will move to the front and center of Facebook’s lobbying efforts to help shape future legislation concerning online privacy. As the Post story detailed, Sparapani brings a high level of credibility to how seriously Facebook takes privacy: When he worked for the ACLU, he championed privacy rights on key issues. He opposed “racial profiling in airport security lines and pushed for stricter rules for how patient information should be used in electronic medical records.”

With privacy, the stakes for Facebook are high. The company has built robust privacy settings that allow users to control what friends can see certain pieces of critical information on their Facebook profiles. From a business perspective, Facebook will thrive if people feel comfortable to share information that advertisers can target their advertising against.

Some reports suggest Facebook users, on a wide scale, care about privacy very deeply, but the terms of service incident and Beacon only caught a minority (albeit a loud one) of the Facebook populace.

Conclusion

Facebook should lobby congress as much as it can to influence the legislation. Try as they may, many congressional members do not understand the complexities of legal issues facing the Web (Former Alaska Sen. Ted Stevens’ remarks on Net Neutrality still ring fresh in memory). While privacy matters, advertisements will sustain Facebook’s growth. Facebook, and any laws that congress may pass, must balance that reality.